Google Cloud CEO Kurian says customers are spending 50% more as segment blows away expectations
GoogleThomas Kurian, ‘s cloud chief, said the company’s existing customers were paying “about 50% more” for its products than they had already committed to, which helped drive hot cloud growth in the second quarter.
“Our existing customers increased their spending when they committed to us,” Kurian told CNBC’s Jim Cramer on Thursday. “They’re spending about 50% more than they’re committing to, and that’s driven by differentiation in our product portfolio, strength in our go-to-market execution, and you see that in both revenue and operating income growth.”
Kurian’s comments came after Google parent Alphabet on Wednesday reported better-than-expected second-quarter earnings, helped by 82% annual growth in its cloud business.
Demand for cloud services is so strong that the company plans to tap third-party providers to fill the extra capacity. This boosted shares of neocloud providers CoreWeave And nebius higher.
Kurian said the move, although hurting margins, was necessary because it allowed Google to capture that demand and customers tended to spend more on other services.
“So for us, looking at it in the short term, as you know, we will be renting some capacity for a few quarters,” Kurian said. “It allows us to attract customers, bridge them once we have enough capacity, which will increase over time and the return on investment will be meaningful for us.”
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